IMF changes rule on debt as Ukraine faces Russia deadline

AFP,  WASHINGTON: The International Monetary Fund on Tuesday changed a rule that would have blocked its financial aid program to Ukraine in the event the country defaulted on debt owed to Russia.
The move—which drew an angry response from Moscow—comes as cash-short Ukraine faces a looming year-end deadline to repay Russia for a $3 billion loan.
Until now, the IMF could not provide financing to a member country that was in arrears to an official creditor, such as a government.
The rule was particularly problematic in the case of Ukraine, which received a $17.5 billion financial rescue from the IMF in March.
“The IMF’s executive board met today and agreed to change the current policy on non-toleration of arrears to official creditors,” said IMF spokesman Gerry Rice in a brief statement.
“We will provide details on the scope and rationale for this policy change in the next day or so.”
Moscow blasted the IMF decision, which could in theory allow Ukraine to miss debt payments to Russia without impacting its bail-out program.
“The decision to change the rules looks hasty and biased. This is done only at the expense of Russia and to legalize the possibility of Kiev not paying its debts,” said Russian Finance Minister Anton Siluanov.
“In these conditions, we have no other choice but use all possibilities to defend our rights as a creditor. We are preparing documents for a court appeal,” he said.

IMF changes rule on debt as Ukraine faces Russia deadline

AFP, WASHINGTON: The International Monetary Fund on Tuesday changed a rule that would have blocked its financial aid program to Ukraine in the event the country defaulted on debt owed to Russia. The movewhich drew an angry response from Moscowcomes as cash-short Ukraine faces a looming year-end deadline to repay Russia for a $3 billion loan. Until now, the IMF could not provide financing to a member country that was in arrears to an official creditor, such as a government. The rule was particularly problematic in the case of Ukraine, which received a $17.5 billion financial rescue from the IMF in March. The IMFs executive board met today and agreed to change the current policy on non-toleration of arrears to official creditors, said IMF spokesman Gerry Rice in a brief statement. We will provide details on the scope and rationale for this policy change in the next day or so. Moscow blasted the IMF decision, which could in theory allow Ukraine to miss debt payments to Russia without impacting its bail-out program. The decision to change the rules looks hasty and biased. This is done only at the expense of Russia and to legalize the possibility of Kiev not paying its debts, said Russian Finance Minister Anton Siluanov. In these conditions, we have no other choice but use all possibilities to defend our rights as a creditor. We are preparing documents for a court appeal, he said.